Liability Insuranc3 Flashcards
Why is there a need to effect employer’s liability
So that if a court action is lost the employee’s successful claim for damages is covered by the insurance
Employer’s Liability Act 1969
That employers in Great Britain must be insured against liability for bodily injury or disease sustained by their employees arising out of and in the course of their employment in the business
What did the Employer’s Liability Compulsory Insurance regulation 1988 change
It made a key extension increasing the minimum limit from 2 million pounds to 5 million pounds. Insurers usually provide a 10 million pound limit
What type of accidents make it difficult to know who should be held responsible and liable for subsequent employer’s liability claim
Many industrial illness and some accidents
In 1999 EL service was set up to address which issues
If the original company who employed the claimant at the time the illness was contracted or accident occurred had
1.changed insurers
2.been taken over by another and so change in the name
3.cease trading due to bankruptcy
Or if the original insurer had been taken over/cease trading
EL service was replaced by
Employers Liability tracing office(ELTO)
What is the employers Liability Tracing office job(ELTO)
It is an independent, not for profit company set up by the insurance industry, to provide claimants and their representative with quick and easy access to a database of EL polices through an online enquiry facility
What did the FCA make compulsory in April 2012 in relation to EL
It made it compulsory for all members of the ELTO to provide details of their employers liability policies along with policy records relating to historic covers triggered by claims to allow the tracking of policies by claimants through employers’ liability Database
What was another additional requirement by the FCA
All employers to provide their EL insurers with an employer reference number, the number is unique to the employer and can’t be replicated. All insurers must supply the ERN to the Employers Liability Database(ELD)
Employer Liability Tracing office has adopted the employer reference number as the most effective unique identifier available. Why is that so
This is because even if the employer is taken over/ceases trading/moves tax office the ERN for a specific point in time is permanent
Regular users of the ELD are required to register to gain access to unlimited number of enquiries. How is the registration process
Registration is free, benefits of registration include pre-population of some data fields and unlimited enquiries
Does EL policy have a standard wording
No, wordings vary between insurers
It is common to issue combined liability policy,, than separate ones. What do they constitute of
They constitute of Employers/Public/Product liability. Although separate sections and clause usually apply to each type of liability
All employers Liability policies provide indemnity to
To the insured for legal liability for damages(including claimant costs and expenses) in respect of bodily injury/death/disease/illness sustained by any person under a contract of service/apprenticeship with the insured
For EL to be effective it has to be
- caused during the period of insurance
- arising out of and in the course of their employment by the insured
- in connection with the trade/b’ness
- occurring within certain territorial limits
Under the term Legal Libaility, The Employer Liability policy only indemnifies
It only indemnifies the insured in respect of their legal liability to pay damages
When an accident occurs and its a pure accident no negligence, which policy is supposed to be in effect
The employee must rely on personal accident and sickness insurance/social security system to obtain benefits
When an employee suffers injury as a result of their employer’s breach of statutory duty or fellow employee negligence they will be entitled to seek compensation. What are the different forms of compensation
- Compensation for any expenses incurred
- compensation for loss of earnings
- Compensation for possible loss of future earnings
- compensation for pain and suffering
- compensation for other items
What is Vicarious Liability
This is when the employer is liable for the negligence of employees arising in the course of their employment
Is an employer’s liability over an employees property covered under Employers Liability
No, this is not covered because EL is concerned only with death/injury/disease. Loss/damage of property would come under public liability
What is the definition of an employee
This is any person who is under a contract of service or apprenticeship with the insured
Most policies extend the category of direct employee to include
self employed persons/hired persons/student on work experience
Why do insurers ask for an extensive list of persons employed in a firm
The intention is to ensure that the insurer receives an adequate premium by asking for declaration of wages/earning for each category, which is used to fix and adjust premium
Some diseases develop over a period of time and may not become apparent until some years after they first started, possibly after the relevant policy has expired,does the insurer still cover this
Provided the injury/disease was caused during the period of insurance, the insurer is liable and it is immaterial that the policy may have expired
For gradually developing diseases that have been progressively worsening, how does insurer provide cover
Insurers that have covered the Employers liability risk over the development period will share the costs according g to the length of time they were on risk
What are the territorial limits that generally apply
- In Great Britain, Northern Ireland, Isle of Man, the channel island
- while temporarily outside these territories sometimes restricted to non-manual workers
What are the two extensions of Employer’s Liability Policy
- Defense Costs and Expenses
2. Additional Persons Insured
Defense Costs and Expenses cover
This policy indemnifies the insured in respect of their own costs and expenses incurred in settling/defending a claim. Insurer in practice will appoint legal representatives as appropriate
Additional Persons Insured
This cover is available in respect to any director/partner/employee of the insured for any action bought against them, in their personal capacity for which the insured would be entitled to indemnity under the policy
For Employers Liability policy cover may be limited by an insurer as part of the underwriting process in terms of applying trade clauses
- by restricting the definition of b’ness
- by excluding certain kinds of work
- by excluding certain machines/processes
Most employer liability policies are rated on what
They are rated on wages for different categories of job type
Most EL policies will usually include
They will usually include reasonable precautions condition
What is reasonable precautions condition used for
It is used for affirming that the employer will comply with statutory regulations and a condition stating how the premium will be adjusted
How is the premium for employers Liability fixed and paid for
An estimate of the wages is made at the beginning of the period of insurance and a provisional premium is paid, then at the end of the period after the actual figures are adjusted, the insured either pays an additional premium or receive a rebate
What is another practice of fixing and paying employers liability premium
Applying minimum and deposit premiums, this is prompted by the insurer as a desire to retain at least the quoted premium. Premium can either remain the same(if declared figures are equal/lower than original estimates) or an additional premium is charged when the actual figures are higher
For Motor Vehicle related accident, how does employer liability apply
The law states that employer’s liability towards the driver of a vehicle is covered by the employer’s liability policy.If driver supplies a defective vehicle,(gets into an accident)
Are the claims of an employee who are passengers of the defective vehicle covered by the employer liability policies
No, they are not. They will be dealt under motor insurance policy, even if the accident occurs in the course of the employment.
Is Public Liability a specific or open policy
It is an Open policy as opposed to EL/product liability/professional indemnity which are specific policy
Public Liability is an open policy meaning that
This meaning instead of the scope of cover being specified by insured perils, it is defined by the exclusions of specific perils
Public Liability insurance provides compensation to
It is designed to compensate an insured in respect of claims for legal liability from members of the public/companies who may suffer due to their negligence or that of their employees.
To whom does a public liability policy provide indemnity to
It provides indemnity to the insured for legal liability to third parties for damages( claimant’s cost and expenses) in respect of bodily injury/death/disease/illness.
Apart from indemnity to insured for legal liability to third parties, where else do they provide indemnity
Also provides cover for any loss or damage to property which happens in connection with the b’ness insured under the policy, occurring during the period of insurance
Legal liability for public liability covers which forms
It covers all form of negligence, which is usually the most common cause of claims, also nuisance/trespass/liability under statute
Why do Some Public Liability policies mention accident
As the policy is only intended to cover unexpected events, phrases like “accidental death of /bodily injury”
In PL policy if the word accident is not used, what do insurers do instead
It is usual for the insurer to incorporate an exclusion for injury/damage which s a result of a deliberate act/omission of the insured
Injury to persons mean
This relates to bodily injury/death/illness/disease of any person, there must be some form of physical/medical impairment
Under PL, how do insurers insure loss/damage to property
Most insurers only insurer the risk of physical damage to material property and liability for loss of property. e.g. theft of customers goods at the insured premises.
Under PL, what do insurers not insure loss/damage to property
They don’t insurer risk of damage for intangibles like copyright/patent/trademark or indirect economic loss
Does PL cover Consequential loss
Yes, it covers losses directly flowing from accidents resulting in injury to persons/damage to property
Pl provides a limited form of cover for pure financial loss, which can be defined as
Financial loss which a third party may be able to claim even in the absence of injury or damage to property
